On Wall Street, if an investment looks, smells and quacks like a duck, it’s probably best to let it waddle away into the sunset. When it comes to buying micro-cap, novel coronavirus play iBio Inc. (NYSEAMERICAN:IBIO) stock, the forgone conclusion that it’s a “quack” hasn’t changed much despite the company’s constant self-promotion.
The new pandemic has caused a good deal of heartbreak and difficulties to say the least. But, occasionally, some of that pain is the result of bad actors looking to cash in. Investors on Wall Street aren’t immune to this threat. And I think IBIO stock appears to have that certain odor and movement to it.
Call me a cynic, but the relaxed rules and/or too few regulating police patrolling micro-cap stocks open the door for some smaller companies to enthusiastically over-promise on their products or services much more than they should be allowed. Conservatism isn’t rewarded and bad behavior isn’t penalized severely enough.
Now, with the world universally focused on finding cures, vaccines or therapies to combat the coronavirus, there’s plenty of long-time unsuccessful companies suddenly on the forefront of a breakthrough. At least based on suspect press releases that never seem to make it to mainstream financial channels. I think IBIO stock falls into this lowly camp of stocks that are best avoided.
This isn’t my first warning against IBIO stock. Last month at InvestorPlace, I skeptically wrote about the chances for the company’s FastPharming System to produce a vaccine for the coronavirus. I didn’t buy what they were selling then. And there’s no reason to buy today’s all-too-similar chest-beating sales pitch.
The latest announcement this week from iBio’s go-to, GlobeNewswire PR distribution channel dangles more tantalizing carrots for investors regarding its FastPharming System and Covid-19 manufacturing capacity. The company estimates, “if approved,” its proprietary SARS –CoV-2 Virus-Like Particle program, IBIO-200, would be able to produce approximately 500 million doses annually.
Almost identical to last month, the duck-like actions don’t stop there either. The company announced yet another membership. Before it was the company’s admittance into the powerful-sounding “Alliance for Biosecurity.”
Where’s Iron Man or Black Widow?
Now, the National Institute for Innovation in Manufacturing Biopharmaceuticals has put out the welcome mat for iBio. I’m not doubting the authenticity. But just like today’s “Space Force,” I’m not holding my breath it will mean anything for you or me today or in the near future.
IBIO Stock Monthly Price Chart
Source: Charts by TradingView
To be clear, I’ll stress once more that I could be wrong about iBio. So far though, and as the price chart has demonstrated, I’m not.
Most often with this type of hot, speculative investment-of-a-lifetime-type stock, the caution is rewarded. Still, without a science background and detective’s badge, everything iBio claims to be and to be working on could be real.
Ultimately, my advice remains the same with IBIO stock. If investors are fixated on owning a piece of the coronavirus for their portfolio, I’d look elsewhere. And I’d start by recommending a large cap biotech or pharmaceutical such as Gilead Sciences (NASDAQ:GILD) or Regeneron (NASDAQ:REGN), which have their own promising Covid-19 drugs. Each also offers other critical revenue streams and plenty of cash to burn — rather than the kind of fuel to burn investors.
Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.